Evan Carmichael Top Header about About About facebook Twitter YouTube Google+

SMEs - a changing trend in SME failure



Free PDF Download
SMEs and entrepreneurs in Africa - By Dr. Rob Smorfitt

Name: Email:


I commented on another blog the other day about SME failure. I asked the question whether the failure rate of SMEs was up or down. Stefan replied that in the USA the failure rate of SMEs has in fact reduced. Does this apply to Africa or more specifically South Africa?

This is significant. However, other statistics I saw showed that 70% of SME's in the USA are one person businesses. These are baby boomers who legally go into retirement and then return to the economy as SMEs providing services back to their previous employers because of the skills shortage that the departure of baby boomers is contributing to. This trend is definitely occuring in South Africa. The massive skills shortage, which is compounded by the broad range of legislation geared to bring more black Africans into the economy without providing them the necessary skills to do so, is a direct contributor to this trend in South Africa. Government attempts to develop skills in South Africa have been a dismal failure. The apprenticeship system has all but collapsed, which has resulted in insufficient artisans in the country, together with the drive by developed countries to attract artisans to meet the demand created by their economic growth.

The restructuring of the tertiary education has lead to everyone attempting to compete with one another instead of each tier adding it's own unique value to the economy in respect of skills.

My question now is whether or not there is a trend developing whereby there are one person businesses which are highly sustainable due to their origins and source of business, and then a large gap before we see business in the 10 to 20+ employee range? Are we seeing this valley between the one person and the bigger SME growing?

I think perhaps we are, and I feel that the reason could be globalisation/Walmart effect, which leads to ever reducing prices.



Related Articles

  SMEs - are African governments doing it right
  Leverage Subject Matter Experts
  Restricted Access to Finance
  5.2.1 The MIT-SME section: Support for Growth-oriented Women Entrepreneurs in Tanzania, 2005
  What can business and governments do to promote SMEs?
  Facts about SMEs in Africa
  Improving business conditions - Increasing SME Access to Finance: A Four Pronged Approach
  SMEs in Africa - do interventions help SMEs
  Expanding the supply of finance through the non-financial private sector - Increasing SME Access to Finance: A Four Pronged Approach
  SMEs - my PhD topic and African context
  Helping SMEs meet the requirements of formal financing - Increasing SME Access to Finance: A Four Pronged Approach
  SMEs – SMEs struggling in South Africa. Why?
  5.5 Energy access as market failure: Enterprise solutions to poverty
  SMEs - SMEs and labour rigidity
  SEO, why are you hiding?
  Applying simple moving average to your Automated currency Trading
  Is the Government of Canada's Shared Services Strategy a Threat to Small Business (Survey Result 1)
  5.7 Meeting the needs of the entrepreneur: Enterprise solutions to poverty
  Small- and Medium Enterprises: Better access to information management and knowledge networks
  SMEs in Africa: the “Missing Middle”

Home > African-Accounts > Dr. Rob Smorfitt > SMEs a changing trend in SME failure >

Free PDF Download
SMEs and entrepreneurs in Africa - By Dr. Rob Smorfitt

Name: Email:

About the Author: Dr. Rob Smorfitt

RSS for Dr. Rob's articles - Visit Dr. Rob's website
Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com. I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
Click here to visit Dr. Rob's website.
Dashed Line

More from Dr. Rob Smorfitt
SMEs survivalist start ups in South Africa present a unique problem
SMEs working in the dark
SMEs SMEs and South African banks
SMEs whose responsibility is finance for SMEs
SMEs the impact of corruption has deep roots

Related Forum Posts

When does a trend become a legitimate business opportunity? When does a trend become a legitimate business opportunity?
Re: A great website is closing down Re: A great website is closing down
Re: Quote of the Day - “The key is to get started. Too many peop Re: Quote of the Day - “The key is to get started. Too many peop
Re: In-House or Outsource? Re: In-House or Outsource?
Are franchises with unhealthy foods still wise investments? Are franchises with unhealthy foods still wise investments?

Share this article. Fund someone's dream.

Share this post and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
Share for a Cause
Featured Article



Worksheets
By: Evan Carmichael

Do you have what it takes to be an entrepreneur?

8 Powerful Steps to Finding Your Passion

Does your pitch suck?

Create a plan of attach to launch your new business.

8-Cover

Like this page? PLEASE +1 it! Evan Signature
Bottom Footer



Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Name:
Email:
Popular Articles

YOUR ROLE AS SUPERVISOR AND MANAGER

10 Common Business Planning Errors

What’s the Real Key to Success? It’s Failure

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.